Premium Essay

Unit Trust

In: Business and Management

Submitted By miszsafra
Words 4802
Pages 20
MARKET EFFICIENCY AND THE PERSISTENCE OF UNIT TRUST PERFORMANCE IN MALAYSIA

CHAPTER 1
1.1 Introduction

According to M.Rhodes, Research paper no. 2002 -2006, their offerings on the price many choose to highlight their past performance, implicitly as an indicator of future returns. The existence of persistence in performance is indicative of market Inefficiencies which some, but not all, fund managers are able to exploit. In an extension to the current literature the paper tests the proposition that changes to infrastructure, insomuch as they might affect market efficiency, affect the persistence of performance. Evidence is also presented on whether excess returns are the result of better skill or information for some managers or the existence of a momentum effect in stock returns. When picking a fund an investor faces a bewildering yet important choice from amongst several hundred product offerings and there is a considerable degree of price dispersion. Studies of Malaysia funds have relied on the assumption that conditions determining market efficiency, or the ability of fund managers to exploit inefficiencies, do not change significantly during the period examined.

According to this research paper (2002-6), the unit trust industry in Malaysia can be considered relatively young. The first unit trust, Malaysia Investment Fund was launched in Dec. 2, 1966 by Asia Unit Trusts Be&ad. However, the industry can be expected to take off in the years ahead in light of recent positive developments within the industry. Such developments include the new Guidelines on Unit Trust Funds issued by the Securities Commission, the setting up of the Federation of Malaysian Unit Trust Managers, the launching of several state unit trusts and the emphasis on unit trusts that are based on Islamic principles. The Islamic based unit trusts are set up to provide wider avenues for...

Similar Documents

Premium Essay

Islamic Unit Trust

...researcher is “Islamic equity unit trust funds’ performance in Public Mutual Berhad”. Where this paper will go through and analyze the performance of Islamic unit trust in the selected company by using FTSE Bursa Malaysia Composite Index (KLCI) as benchmark in order to comparing with. In the first chapter the researcher will be discussed about the background of study,which provides a general idea on the scope of the study, identified the problem statement, objective of the study and it followed by significant of the study.The content of the report consist of introduction part, literature review, research methodology, finding and analysis and also conclusion. The proposed directions of the study were highlighted and are expected to fulfill the requirement of the study. 1.1 Background of Study There are lot of investment alternative that have today, but it depend on their choice on choose in which investment they want to invest with and also it depend on the skills of investing in such instruments. As most people that are not well knownin investment they will prefer to makeinvestment in unit trust funds because they are lack of information or knowledge in financial as well as investing skills. Unit trust based on free encyclopedia, Wikipedia it is a form of collective investment constituted under a trust deed. It is an open-ended investment where the underlying value of the asset is always represent by the total number of unit be issued multiply with the unit price less the......

Words: 1017 - Pages: 5

Free Essay

Barclays Terms

...Additional Terms Additional Terms This document sets out the Additional Terms that form part of the Agreement as defined in the Barclays Wealth Terms. If there is any conflict between these Additional Terms and the Barclays Wealth Terms, these Additional Terms will prevail. If words beginning with a capital are not defined in these Additional Terms, they shall have the same definition as in the Barclays Wealth Terms. The following sections of the Barclays Wealth Terms are relevant to the services provided under the Agreement: • Section A, • Section B, • Section D, • Section E, and • Section F. Your classification under the Financial Service Authority (FSA) Rules For the purposes of the FSA Rules, we will treat you as a retail client unless we agree with you otherwise. This does not necessarily mean that you are ‘eligible’ for the purposes of the Financial Services Compensation Scheme or the Financial Ombudsman Service. As a retail client, where you meet the requirements to be recategorised, you have the right to request to be treated as an elective professional client either generally or in respect of a particular service, type of transaction or product. Such request must be made in writing, and we will consider any requests received on a case by case basis against the criteria set out in FSA Rules. We will inform you of any limitations that such a re-categorisation will entail, together with the scope of that re-categorisation. If, following such a request, you are......

Words: 11705 - Pages: 47

Free Essay

Journal

...Islamic unit trust companies in Malaysia Norma Md. Saad, M. Shabri Abd. Majid, Salina Kassim, Zarinah Hamid and Rosylin Mohd. Yusof Department of Economics, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia Abstract Purpose – The purpose of this paper is to investigate the efficiency of selected conventional and Islamic unit trust companies in Malaysia during the period 2002 to 2005. Design/methodology/approach – The paper adopts Data Envelopment Analysis (DEA) to investigate efficiency, as measured by the Malmquist index, which is decomposed into two components: efficiency change and technical change indexes. Findings – The study indicates that technical efficiency is the main contributor to enhancing the efficiency of the Malaysian unit trust industry. In addition, the larger the size of the unit trust companies, the more inefficient the performance. In comparing the efficiency of unit trust companies, the study finds that some of the Islamic unit trust companies perform better than their conventional counterparts. Research limitations/implications – The study is limited to five Islamic unit trust companies. Thus, the findings of this study are indicative, but inconclusive for the unit trust industry as a whole. Practical implications – The results have two important implications for both conventional and Islamic unit trust companies in Malaysia. First, the deterioration of total factor productivity (TFP) in the unit......

Words: 11712 - Pages: 47

Premium Essay

Unit Trust

...The main role of a unit trust consultant would be distributing unit trust or mutual funds on behalf of a unit trust managemen company/ bank to the public. By explaining and analysing each and every fund that are distributed, unit trust consultant aid their clients in giving their best bets on their investments. In reality, a unit trust consultant is helping their clients in achieving financial independence at earlier age. And these need to start from educating them how important a financial plan is. Many people do not sense the urge of having a financial plan till they face financial difficulties. Therefore most of the governments “force” their citizens to build up their personal retirement fund which is mostly directly deducted from their pay/wages. For example, in Malaysia, every employees and employers ought to contribute to Employee Provident Fund (EPF). People can only withdraw the money when they reach the age of 55. However, 70% of the contributors spent all their EPF money after 3 years from their retirement, which seems do not serve the main purpose of setting up EPF. Thus in this case, unit trust consultant comes in and serve a role. There are many ways or types of investment which we can use to build up retirement fund. Long term investment in unit trust would be one of the most efficient way to build up a fund and at the same time offer a handsome return. There are 2 rules to follow in investing for unit trust: First, mid to long term investment. Second,...

Words: 295 - Pages: 2

Premium Essay

Final Year Project

...risks and rewards of investing in schemes which seek to offer attractive returns. Total of 122 respondents were selected for data analysis. The respondents’ profile consists of demographic data namely, age, gender, occupation background, educational background, investment habit and years of investing activities. The gender, monthly income and race of respondent are not relevant for this research since it is basically focused on the investors’ habit in Malaysia. The perception will be taken into consideration as per their views on mutual fund investment. The last and final analysis of hypothesis testing is to complete the proposed theoretical framework for this study. Keywords: Mutual Fund Investment, Expected Return, Perceived Behavior, Unit Trust Scheme, Contents Chapter 1: Introduction 5 1.1 Introduction 5 1.2 Background of the Study 5 1.3 Problem Statement 8 1.4 Research Aims and Objectives 9 1.5 Hypothesis 10...

Words: 12899 - Pages: 52

Premium Essay

Trade

...GLOSSARY OF FOREIGN DIRECT INVESTMENT TERMS AND DEFINITIONS This glossary forms part of the 4th Edition of the OECD Benchmark Definition of Foreign Direct Investment and is intended to assist both the compilers and users of direct investment statistics. Acquisition An acquisition is a business transaction between unrelated parties based on terms established by the market where each enterprise acts in its own interest. The acquiring enterprise purchases the assets and liabilities of the target enterprise. In some cases, the target enterprise becomes a subsidiary or part of a subsidiary of the acquiring enterprise. In principle quantitative or qualitative information directly concerning multinational firms could be classified under activity of multinational enterprises. However, within the framework of the OECD Handbook on Economic Globalisation Indicators, data on the activity of multinationals covers all economic and industrial data which are not associated with FDI, portfolio or other financial transactions. Data collected by the OECD within the framework of the surveys on the economic activity of multinationals include 18 variables, notably gross output, turnover, value added, number of people in employment, employee compensation, gross operating surplus, gross fixed capital formation, R&D expenditures, number of researchers, total exports and imports, intra-firm exports and imports, and technological payments and receipts. Affiliated enterprises are enterprises in a......

Words: 7307 - Pages: 30

Premium Essay

Invetment Process of Islamic Bank

...4.1 Investment Process of FSIBL: Generally a bank takes several steps to deliver its proposed investment to the client. The process takes deep analysis because it invests deposit fund not its own fund. If the bank fails to meet the depositors demand, then it must collapse. So each bank specially Islamic bank should take strong concentration on investment proposal. However, First Security Islami Bank Limited (FSIBL) makes its investment decision through successfully passing the following crucial steps: 4.1.1 Induction of new client: * Only potential and genuine clients having Al-Wadiah Current Account with proper introduction and with satisfactory transaction for a reasonable period (generally six month) should be induced as a investment clients. * Past performance of the client with other Bank/ Branches of the Bank to be looked into. * Satisfy about reputation of the client in the business community. General eligibility criteria for selecting a client as follows: * Bangladeshi Nationality, physical capable and age limit from 18 to 60 years. * Proprietorship/ Partnership/ Private Limited Company. * Valid licenses like Trade Licenses, VAT registration, TIN etc. * Source and capacity of repayment backed by positive cash flow. * Definite market and prospect of future expansion. * Adequate infrastructure facility and manpower with required skill and experience. * Clean CIB report. * The client must have clear idea about the business......

Words: 2534 - Pages: 11

Premium Essay

Unit and Investment Trusts

...Unit and Investment Trusts This essay mainly deals with the problems of unit and investment trusts. Firstly, it will shortly introduce the definitions of two different funds, then after identifying the main difference between them, it will talk about the advantages and disadvantages for each other. Finally, it will come up with a conclusion. Unit trusts and investment trusts are two types of funds that people can invest in as a private investor in the world. They together form the very fundamental way of how funds operate. Unit trusts are‘open-ended’funds, which means that the size of the fund and the number of units depends on the amount of money investors put into the fund.(Arnold,2012:30) Moreover unit trust fund is an investment scheme where money from many investors is pooled together for collective investments, and is invested towards a specified goal as stated in the investment objective of the fund.(Fig1.1) (ambmutual.com) Arnold(2012) also claimed that investment trusts differ from unit trusts-they are companies able to issue shares and other securities rather than units. Investors can purchase these securities when the investment company is first launched or purchase shares in the secondary market from other investors. These are known as closed-end funds because the company itself is closed to new investors – if you wished to invest your money you would go to an existing investor to buy shares and not buy from the company. An open-end fund does not......

Words: 1018 - Pages: 5

Premium Essay

Case Studys

...Paper 5 The Recovery of Trust: Case studies of organisational failures and trust repair BY GRAHAM DIETZ AND NICOLE GILLESPIE Published by the Institute of Business Ethics Occasional Paper 5 Authors Dr Graham Dietz is a Senior Lecturer in Human Resource Management and Organisational Behaviour at Durham University, UK. His research focuses on trust repair after organisational failures, as well as trust-building across cultures. Together with his co-author on this report, his most recent co-edited book is Organizational Trust: A cultural perspective (Cambridge University Press). Dr Nicole Gillespie is a Senior Lecturer in Management at the University of Queensland, Australia. Her research focuses on building, repairing and measuring trust in organisations and across cultural and professional boundaries. In addition, Nicole researches in the areas of leadership, teams and employee engagement. Acknowledgements The authors would like to thank the contact persons in the featured organisations for their comments on an earlier draft of this Paper. The IBE is particularly grateful to Severn Trent and BAE Systems for their support of this project. All rights reserved. To reproduce or transmit this book in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, please obtain prior permission in writing from the publisher. The Recovery of Trust: Case studies of......

Words: 16669 - Pages: 67

Free Essay

Mppo

...Interviewer: Saikat Roy Roll No: 1401117 Interviewee: S Company: Garden Reach Shipbuilders &Engineers (Ministry of Defence) Work Designation: Project Manager Years of Experience: >=25 years ___________________________________________________________________________ Interviewer: Good Evening, Sir. Interviewee: Yes. Interviewer: Can you give us a brief background about yourself; where you have worked; the work culture at that place and the designation which you hold? Interviewee: I am a project manager in Central Design Unit of Garden Reach Shipbuilders & Engineers. I am the project manager of a naval base project and I have been assigned a group of 3 engineers and 6 supervisors. When a new project comes, we sit together with our boss and the subordinates; discuss various aspects of the project, try to incorporate every one’s opinion and try to make the project a success. Interviewer: Can you elicit one occasion where you felt the trust in the relationship which you had with your peers or subordinates was developed over time. How did it happen? Interviewee: As I have told you, we are always trying to develop a cordial relationship by sitting together discussing various aspects of the project, taking the views of subordinates and boss, then my boss and I sit together and chalk out the program and then as a project manager I assign the job to everyone. Normally I work hard and I try to be honest with subordinates so that everyone is encouraged to do hard......

Words: 2024 - Pages: 9

Free Essay

Organizational Diversity

...A cross-level process theory of trust development in interorganizational relationships Abstract Most research on trust in inter-organizational relationships focuses on a single level of analysis, typically the individual or organizational level, and treats trust as a fairly static phenomenon. To stimulate more cross-level research, we propose a theoretical model that explains how trust in inter-organizational relationships is related across various levels of analysis. At the same time, our model emphasizes the dynamic aspect of trust by examining how trust develops throughout consecutive relationship stages. Drawing from several programs of research, we identify the mechanisms that drive the progression of trust across levels as the inter-organizational relationship unfolds. Starting with the boundary spanner as the key individual at the beginning of a new collaboration, we specify how trust gradually becomes part of the fabric of organizational action. By integrating micro and macro approaches over time, the proposed model contributes to a better understanding of how trust evolves in inter-organizational relationships. Keywords Alliance dynamics, cross-level effects, institutionalization, inter-organizational relationships, multilevel theory, strategic alliances, trust Introduction In the development of the management of inter-organisational relationships, the issue of trust has increasingly become the main focus (MacDuffie, 2011; Zaheer and Harris, 2006). ...

Words: 9348 - Pages: 38

Premium Essay

Real Estate Investment

...as experienced just before the global financial credit crunch or due to the property’s unique location. This is classified under the short term type of real estate investment. The classification is based on the relative time spent to consolidate worth. The long term type of real estate investment therefore means that the owner has to wait for longer for the property or land to consolidate worth. (Isaac, 1998). The short term type of investments need professional skill, current knowledge and experience in the market. Long term estate investment is generally considered to be the most profitable since the period of the investment is longer and the returns are good. A different classification identifies Real Estate Investment Trusts, land investments, rental properties and vacation rental properties as the different types of Real Estate investments. This is a more narrow and specific classification than the previous one. The history of indirect investment in property can be traced back to the 1950s across the world. A diverse range of property investment vehicles have emerged since then. These exist in the form of both debt and equity. Direct investment has a number of features that form a basis of its attractiveness especially as a means of portfolio diversification. However it has certain adverse features which include heterogeneity of property leading to uncertainty of its value, lumpy property which means that only large financial institutions can......

Words: 3617 - Pages: 15

Premium Essay

Case on Trust

...Recovery of Trust: Case studies of organisational failures and trust repair BY GRAHAM DIETZ AND NICOLE GILLESPIE Published by the Institute of Business Ethics Occasional Paper 5 Authors Dr Graham Dietz is a Senior Lecturer in Human Resource Management and Organisational Behaviour at Durham University, UK. His research focuses on trust repair after organisational failures, as well as trust-building across cultures. Together with his co-author on this report, his most recent co-edited book is Organizational Trust: A cultural perspective (Cambridge University Press). Dr Nicole Gillespie is a Senior Lecturer in Management at the University of Queensland, Australia. Her research focuses on building, repairing and measuring trust in organisations and across cultural and professional boundaries. In addition, Nicole researches in the areas of leadership, teams and employee engagement. Acknowledgements The authors would like to thank the contact persons in the featured organisations for their comments on an earlier draft of this Paper. The IBE is particularly grateful to Severn Trent and BAE Systems for their support of this project. All rights reserved. To reproduce or transmit this book in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, please obtain prior permission in writing from the publisher. The Recovery of Trust: Case studies of organisational failures and trust......

Words: 16670 - Pages: 67

Free Essay

Miss

...hospitals to make cuts, a new report reveals that the firms profiting from the deals are using tax havens to avoid paying millions of pounds in tax. 3. A report by the European Services Strategy Unit, and covered in the Sunday Times, reveals that as many as 70 NHS PFI projects are based off-shore. 4. Expensive PFI contracts have become a huge burden on dozens of NHS trusts. Last week the government announced that ‘hit squads’ of senior government auditors are to be dispatched to seven NHS trusts who are struggling to pay PFI bills. Earlier this year, South London Healthcare Trust, which manages three South London hospitals, was the first trust forced into administration after its £61m annual PFI bills saw the trust’s budget deficit spiral unsustainably. 5. These budgetry black holes are having a real impact on patient care. In a paper for the British Medical Journal, academic Alyson Pollack claims that hospitals blighted by expensive PFI contracts are compromising on care, reducing staff numbers and cutting frontline services. 6. The findings of the European Services Strategy Unit report make particularly unsavoury reading given this backdrop of threatened patient care. 7. The Queen Elizabeth hospital in Woolwich, one of those run by the distressed South London Healthcare Trust, is just one of the PFI contracts implicated in the report. 8. The first hospital in London to be built with PFI money, the Queen Elizabeth is part-owned by three separate funds:......

Words: 558 - Pages: 3

Free Essay

Unit 13 P3

...Skills | Qualities | Communication Effective terminology Correct body language Speak loud and clear Listen to others | A good exampleEmpathy DeterminationBravery Confidence HonestyDecisiveness Trust Discipline Loyalty Discipline Loyalty MoraleRegardMotivationMental ability unit 13 p3 Skills Specialist With the world turning out to be more innovative our strengths will have the absolute most propel hardware which will help them from multiple points of view. High positioning officers would utilize innovation with the goal that they can settle on choices and get ready fight arranges which might or not work but rather at any rate we can advise if something is to be changed. A sample for the naval force the skipper and fighting officer can draw up a procedure based off the data that they would have from operations technician, who'd have attempted to pinpoint the where about of the foe ship, same with air ships and submarines then send data by PCs. Technical It is ludicrous to have the leaders posture with all the technical skills anyway it is vital that they can manage circumstances by approaching others with important skills. The motivation to why somebody would need expert abilities is on the grounds that then they wouldn't be as helpless or the administration wouldn't. Individual qualities: Good example – somebody that others would gaze upward to for positive reasons since they've enlivened them to be similar to them or something in view of the appreciation and...

Words: 751 - Pages: 4